Market experts remain largely skeptical that BBVA’s hostile takeover bid for Banco Sabadell, as currently structured, will successfully move forward. Initially, the Basque-based bank proposed an exchange of shares, but industry insiders increasingly believe that changes to this offer are imminent.
Indeed, market speculation suggests BBVA might enhance its initial bid, possibly incorporating a cash component. As the operation extends over time, attention is turning to the expected decision by the Spanish Competition Authority (CNMC), anticipated in June. Analysts now emphasize that the government’s stance could ultimately prove crucial in determining the final shape of the proposal.
So far, Spain’s government, based in Moncloa, has voiced firm opposition to the merger in its original form. Carlos Cuerpo, Spain’s Minister of Economy, recently reiterated this stance, labeling the transaction an undesired banking concentration. Cuerpo highlighted concerns about possible branch closures and job losses amid a sensitive political climate, as the government struggles to secure parliamentary majorities.
Statements made over the weekend from key figures on both sides continued along established lines. BBVA’s chairman, Carlos Torres, maintained that the operation would benefit the market and Sabadell shareholders, emphasizing that shareholders would ultimately have the final say on the proposal.
On the opposite end, Josep Oliú, president of Banco Sabadell, made his position clear through the Catalan media, introducing a new argument into the public debate. In the absence of a “white knight”—an alternative beneficial merger partner—Oliú called on the government to make a definitive statement. He advocated the importance for Catalonia to maintain a strong institution like Sabadell, particularly since its headquarters returned to the region.
Furthermore, Oliú stressed that the current takeover bid, structured as is, would fail, proposing instead the possibility of a merger with a smaller entity. This approach, he argued, would allow Sabadell to preserve its regional strength without losing the advantages associated with being linked to a larger banking group.
So how have these developments translated into the market?
Banco Sabadell’s stock prices remain robust, holding their yearly highs. The shares, benefiting from overall banking sector strength, have recorded impressive gains this year. Specifically, Sabadell’s stock has appreciated by 48% on an annual basis, gained 50% quarterly, and has continued posting double-digit growth over the past month alone.
BBVA, while seeing a solid stock performance, hasn’t revisited its annual high of €13.59 per share reached on March 18. Nonetheless, the bank remains strong, registering a quarterly increase of 40.5% and an annual rise of 38.3%.
With these market dynamics and political pressures at play, the final decision regarding BBVA’s takeover of Sabadell hangs in the balance. Analysts agree on one thing: the outcome hinges significantly on the Spanish government’s position and a potential revised offer from BBVA, with all eyes now fixed on the forthcoming CNMC ruling and further governmental declarations.
